“The reason the currency has continued to appreciate is because investors are short," said ANZ currency strategist Andrew Salter.

The dollar fell to an eight-month low on Monday as the Chinese government took actions to cool its property market. But it has been on a steady ascent since then, rising from its Monday intraday low of $US1.0115 to a high of $US1.0302 on Wednesday afternoon.

AFR
AFR

Soothing words from the US Federal Reserve members, reiterating their commitment to quantitative easing, have helped strengthen the Australian dollar this week. Positive data on retail and the Reserve Bank of Australia’s decision to hold interest rates have contributed to gains.

Mr Salter said he expects the dollar to trade above parity for the rest of the year. “We think [it’s] reasonably safe."

Also on Wednesday, a spokesman for the IMF reportedly said the $A, along with the Canadian dollar, was set to join the select list of currencies that appeared on its reserve-currency list. Previously the $A has been lumped in the “other" category. The spokesman said the separate identification was scheduled for the next three months.